“Today if we want to go in the direction of multi-layered interoperable ecosystem of blockchains, both policymaker and the blockchain industry, ideally working together, should prioritise the development of standards,” said the report.

The most important standards are for common norms for digital identities and the interoperability between blockchains.

“It is no secret that research is an important element to the success of blockchain,” it said.

The EU through the EU Blockchain Observatory & Forum has decided to allocate as much as upto EUR 340mn to support blockchain projects through 2020 under it’s Horizon 2020 program.

The report recommends the EU to take a wait-and-see approach, giving projects the time to experiment and learn before developing standards or considering governance-related regulations.

The paper also calls for a “diversity of eco-systems” by not “mandating specific technologies under the European Blockchain Infrastructure but rather encourage different technologies to foster innovation.”

It further advocated the use of fiat money on-chain to facilitate blockchain based payments and the adoption of smart contracts.

“An open data policy within government, providing bridges to publicly available information in government databases to blockchain-based systems, would help foster the technology,” the report said.

The paper called upon the governments to be aware of blockchain and be prepared for potential disruption to be wrought upon by the new technology.

Finally, the report said that the success of the blockchain industry is likely to be determined in large part by the legal and regulatory clarity of the blockchain industry.

They include, for instance, “resolving tensions between GDPR and blockchain, the legal and fiscal and accounting status of crypto assets, and the legal status of smart contracts, among others.”